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Major FirstGroup shareholder demands resignation of CEO, two board members




July 26 (Reuters) – Coast Capital on Monday demanded the resignation of FirstGroup’s chief executive and two board members following a contentious asset sale, deepening the rift between the UK transport company and its main shareholder.

New York-based Coast, which owns around 15% of FirstGroup, opposed the sale of the company’s US FirstStudent and First Transit operations to Swedish group EQT, arguing the price was too low.

The deal was struck last week after 61% of investors at a meeting in May voted to sell $ 4.5 billion. FirstGroup then increased shareholder return 37% to 500 million pounds ($ 687 million), using part of the proceeds from the sale.

Coast Capital has presented FirstGroup with other deal proposals that Coast believes will deliver superior shareholder value, founding partner James Rasteh told Reuters, but added that the company had not made a commitment with Coast.

The proposals included a possible sale-leaseback transaction and deals involving a special acquisition vehicle, Rasteh said.

“In light of the board’s decision to take a different path, Coast Capital and fellow shareholders are asking that (FirstGroup CEO Matthew) Gregory resign,” Coast said in a statement. He also called for the resignation of board members Julia Steyn and Warwick Brady.

A representative from FirstGroup declined to comment on Coast’s resignation request, but said: “We are constantly engaging on a variety of topics with all of our major shareholders. We have carefully considered the various contours and initial ideas of Coast Capital for the ‘business over time. “

The company’s sale of FirstStudent and FirstTransit “has achieved full strategic value that goes beyond the pandemic,” the representative said, adding that the deal also allows the group to address long-standing liabilities. and contribute to the deficits of his pension plan.

Coast Capital also pushed for Gregory’s ouster in 2019, but failed to gain the support of a majority of shareholders. Yet a candidate for Coast Capital’s board of directors, David Martin, was ultimately named chairman.

FirstGroup is focusing more on its bus and train business in Britain and is trying to find a buyer for its Greyhound bus service in the United States.

Shares of the FTSE-250 group fell 2.6% on morning trading on the London Stock Exchange, but were last down 1% at 08:45 GMT.

Schroders, the second largest shareholder of FirstGroup, who also opposed EQT’s original deal with Coast, did not immediately respond to a request for comment on Monday.

($ 1 = 0.7276 pounds)

Report by Yadarisa Shabong in Bengaluru Editing by Tomasz Janowski

Our standards: Thomson Reuters Trust Principles.




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